Just how strong is Etsy's (ETSY 8.22%) ability to grow internationally? In this clip from "The Rank" on Motley Fool Live, recorded on May 2, Motley Fool contributor Jason Hall discusses the expansion opportunity ahead for Etsy and why now might be the time to buy its stock.
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Jason Hall: What's the story for Etsy? I think we're all familiar with, at least in name, the Etsy product, right? The e-commerce platform for makers of handmade goods, custom goods. Maybe you want somebody's name engraved on something, right? Or, you're looking for that special gift for somebody. That's the main thing we think of for Etsy, right? And it has grown both the number of buyers on the platform, regular buyers, habitual buyers, and also the number of sellers on the platform both at enormous rates over the past two or three years. We've also seen it be resilient. One of the big sellers, I think at one point, maybe close to a quarter of its sales during the pandemic were masks, right? This became a huge boom. That business is single digits now, yet its revenues and earnings continue to grow. So, the business has proved really resilient. The other thing is it's not just Etsy. There's also Reverb, which is a really interesting platform for selling used music equipment, guitars, that sort of thing. PA equipment, also. And then you have-- oh goodness, the name is falling off of my tongue, but it's the platform for second-hand clothing. It's a big and growing business. We've seen a number of companies go public in that space over the past year-and-a-half or so, so that's a really growing, emerging platform. Internationally, Elo7. E-L-O-7, if you read it out. It's commonly called the Etsy of Brazil. It operates in over a dozen countries, and I think it has eight or nine countries that are kind of its core focus. So those core markets and those core businesses that it is in right now is, a multi-hundred billion-dollar business. The reason I ranked it a little bit lower is: e-commerce is difficult and challenging. Continuing to scale up by adding sellers to its platform, the question is: how scalable is that? Particularly, when you get outside of North America. It's made in roads in Europe and it's starting to get larger in other places, but I want to see a little more evidence that its ability to grow international is as strong as its ability to do that in the U.S. It's just not as easy. It's just not as easy, and I want a little more proof about its international growth before I would rank it higher than I did.